Posted on: 17th Sep, 2007 07:34 am
I have a piece of property for sale and have been presented with an offer that includes a "carryback" option. We are asking $199,900. The buyer would lilke to pay us $25,000 and have us carryback the remainder while he makes monthly payments to us. He will then payoff the remiander once he secures his construction loan.
Am I missing something here with thinking this is an OK idea?
Am I missing something here with thinking this is an OK idea?
Hi Ullzz,
Welcome to the forum.
Being the owner of the property, you should consider several points before selling your property with carry back option. At first, you must ensure that there is a lot of equity in your property. You must do an appraisal of your house to find out its proper market value before the sale. Before selling the property with carry back option, you should properly do the paperwork of the transaction to avoid any problem, if occur, in future.
Welcome to the forum.
Being the owner of the property, you should consider several points before selling your property with carry back option. At first, you must ensure that there is a lot of equity in your property. You must do an appraisal of your house to find out its proper market value before the sale. Before selling the property with carry back option, you should properly do the paperwork of the transaction to avoid any problem, if occur, in future.
The idea is sound if the following thing is true...
The buyer has to be able to qualify for his new loan.
What does a construction loan have to do with purchasing an existing property?
In addition a carryback is when a seller holds a mortgage for a buyer. If you do this you should make it for a short period of time. Giving you a right if he can't get his financing arranged. In most states if you do offer this mortgage to him you have to charge him interest. And it should be comparable to local market rates. You should not give him ownership until you have been fully paid.
Do you currently have a mortgage?
The buyer has to be able to qualify for his new loan.
What does a construction loan have to do with purchasing an existing property?
In addition a carryback is when a seller holds a mortgage for a buyer. If you do this you should make it for a short period of time. Giving you a right if he can't get his financing arranged. In most states if you do offer this mortgage to him you have to charge him interest. And it should be comparable to local market rates. You should not give him ownership until you have been fully paid.
Do you currently have a mortgage?
